WASHINGTON, June 25 /PRNewswire/ -- Sales of previously owned homes picked up in May, as buyers continued to take advantage of low mortgage rates and stable prices, according to the National Association of Realtors.
The association recorded a seasonally adjusted annual sales rate(A) of 3.61 million existing single-family homes in May, up 4.6 percent from May 1992, when the resale rate was 3.45 million units.
According to NAR President William S. Chee, the resale increase in May suggests that the "summer selling season" will be active. "This is a very positive sign. Buyers are out in force. People are showing up at open houses, ready to negotiate."
Chee noted that the increase in activity goes hand-in-hand with an overall improvement in the nation's economic growth. "The fact that buyers are in the market shows that consumers' confidence is on the rise. They feel secure enough to make major purchases," he said. "More and more people are becoming convinced that the economic recovery is here to stay," Chee said.
Although many purchases are being made by first-time buyers, the trade-up market also is quite busy, Chee noted. Generally, summer is the house-hunting period for families anxious to get settled before school starts, he added. "Today's low mortgage rates are permitting people to get more house for their money. In some instances, buyers can move up to a larger home, using a larger loan, without seeing an increase in their mortgage payments," he said.
Low mortgage rates are continuing to make home ownership very affordable. The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 7.47 percent in May, down from 7.48 percent the previous month, and down from 8.67 percent in May 1992.
Last month's national median existing single-family home price was $106,100, which was 2.9 percent higher than one year earlier, when the price was $103,100. The median is the midpoint in the price range -- half the homes sold cost more, half cost less.
According to NAR Chief Economist John A. Tuccillo, home values likely will rise at a moderate rate over the next few years, compared to the surge many markets experienced during the 1980s. "We're looking for slow, steady appreciation. In general, home prices will stay more in line with consumers' incomes than they did during the past decade," Tuccillo said.
Through May, 1.38 million existing single-family homes had been sold nationwide, representing a 1.0 percent increase over the total for the first five months of 1992.
An ample supply of affordable housing resulted in strong year-to- year sales increases for both the Midwest and South. In the Midwest, the resale pace of 980,000 units jumped 6.5 percent from May 1992. The median price for existing single-family homes in the Midwest was $86,200 last month, up 5.6 percent from one year earlier.
The South posted a resale rate of 1.37 million units in May, up 8.7 percent from the May 1992 pace. The region's median price was $94,700 last month, up 2.5 percent from one year earlier.
Despite weak economic conditions in California, home resales in the West rose from one year earlier. In that region, the resale rate was 750,000 units in May, 1.4 percent above that for May 1992. The median price in the West was $140,100 last month, down 2.7 percent from May 1992.
The only regional resale decline was posted in the Northeast. In that region, the sales rate of existing single-family homes was 500,000 units in May, which was down 3.8 percent from one year earlier. The median price in the Northeast was $138,600, down 2.7 percent from May 1992.
Currently, NAR is predicting existing single-family home sales to total 3.64 million units this year, representing a 3.4 percent increase from the 1992 total. The median price for existing single-family homes is expected to be $106,300, rising 2.5 percent above the price for last year.
The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
(A) The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume normally is higher in the summer than in the winter, primarily because of differences in the weather.
-0- 6/25/93
/CONTACT: Trish Morris, 202-383-7560; Cheryl Spector, 202-383-1289; or Walter Molony, 202-383-1177, all of the National Association of Realtors/

CO: National Association of Realtors ST: District of Columbia IN:
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IH-DS -- DC003 -- 5606 06/25/93 08:47 EDT

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